legal, taxes, international, italyI’m in Italy and I’m going to create my own hosting company. Obviously, if I register my activity here, I must follow Italian law and pay Italian taxes.
Is possible to register my activity in another country (New Zeland for example) and manage the whole activity from Italy and pay taxes to New Zeland without having problems with the Italian laws?
Do I need to be a citizen of New Zealand?
Must my server be physically located in New Zealand?
You must register your business under New Zealand law and pay tax over there for any invoice that you issue.
Now, how are you collecting money from your clients? If accepting Credit Card online, you must sign up with a New Zealand merchant to get the money paid into your account.
Then, as you live in Italy, you would need to transfer this money from your New Zealander account to your Italian account. At this point, you have to inform the Italian tax office where this money is coming from. Depending on the amount and the country, you will be required to pay tax over this amount as it will be classified as an income.
Is possible to register my activity in another country (New Zealand for example) and manage the whole activity from Italy and pay taxes to New Zealand without having problems with the Italian laws?
It’s possible to register and operate such a company, but you’re asking for trouble if your business has no compelling reason for being there.
On paper, it’s legal to create a company in outside of your country of residence, pay taxes there, and have the company pay you a salary, a management fee, or dividends on which you pay local taxes and social security and pension and what have you.
In practice, your taxman most assuredly won’t see it that way unless you actually have a very compelling reason to be operating the business outside of your country of residence. And no, lower taxes are not a compelling reason. You need to have employees and/or co-founders there. If you cannot provide the requisite compelling reasons, you’ll end up with a full-blow, cavity-search like tax audit. And you will end up in trouble.
Do I need to be a citizen of New Zealand?
Not any more than you’d need to be an Italian to create an Italian company.
Must my server be physically located in New Zealand?
No. And you’ll actually be better off placing your servers where your clients are to keep network latency low – i.e. the US, Canada, the UK, Germany, France, Benelux, Japan, China, etc.
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